In his Budget, Chancellor Alistair Darling launched an attack on plastic carrier bags, saying the Government would take action if shops did not start to charge people to use them.

But a Wolverhampton recycling company says it has a better solution – turn them into building materials, along with any other plastic waste products.

Omnia Recycling said it can take waste as varied as plastic bags, yoghurt pots, margarine tubs and crisp packets, mixed together, and turn them into fence posts and garden furniture that do not rot, split, splinter or biodegrade.

And it added this could be a solution to a crisis in the timber industry at the moment, with prices climbing and some preservatives being banned which is making fencing, construction timber and outdoor furniture increasingly expensive and with a reduced life expectancy.

"We have invested heavily in the development of our plant in Wolverhampton and can recycle more than 100 tonnes a week of waste plastic. This represents the domestic plastic waste generated by around 500,000 people."

Omnia’s new technology means it can make a full tonne of plastic product from every tonne of waste it gets, making the procedure very efficient.

The firm is keeping its exclusive process – which allows staff to mix different types of plastic together – a closely guarded secret.

The company is now planning a second plant and has plans to roll the technology out all over the UK through partnership with local authorities.

And it said it could put up a site anywhere in the world with a minimum of difficulty.

Mr Barker added: "In the UK we throw away nearly five million tonnes of plastic waste every year.

"Our technology can reduce this dramatically and produce a useable, cost effective, green procurement product at the same time, that is the same price as traditionally used materials.

"There is no reason why we cannot have a plant in every major conurbation in the country and this is indeed our ambition and drive for the next five years.

"Now that we have developed the technology it is easy to see just how quickly we can roll it out when you consider that for a cost of just over £1 million we can build a plant capable of recycling the plastic waste generated by 500,000 local people, anywhere in the world, in under six months."

He added the Omnia recycling solution was a cost effective and sustainable alternative to banning plastic bags, especially considering the carbon footprint implications of using paper bags instead.

Although paper bags are biodegradable, they are still likely to end up in a landfill. And because they do not ball up as tightly as plastic bags, they require five times as much landfill space, and five times as many lorries to transport them.